2. 2 ABOUT THE SURVEY Burson-Marsteller commissioned Penn Schoen Berland (PSB), the global market research and consulting firm, to carry out the Trust & Purpose survey. PSB completed 3,161 online interviews among the general population in the following countries from 5 May to 16 May, 2011: Belgium, Denmark, Estonia, France, Germany, Greece, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and United Kingdom. Data was weighted to age and gender demographics for each country.
3. Introduction 3We live in turbulent times. The continued sees companies as dishonest and believes thatuncertainty stemming from the global economic most communications from companies are lies.and financial crisis that erupted in 2008, togetherwith the corporate and banking excesses that In 2010 we carried out our first Purpose Impactwere uncovered during this period are having a Ranking together with IMD business school.fundamental impact on consumer confidence. The study ranked 213 European companies in 10The result - as shown by our first European Trust & industries according to the effectiveness of theirPurpose survey - is a steep decline in trust in a Corporate Purpose. It also carried out analysis whichrange of organisations. demonstrated that a strong and well communicated Corporate Purpose can impact financial perfor-It is not an exaggeration to say that the downturn mance by up to 17%. Corporate Purpose requireshas had a catastrophic impact on trust in corporations companies to be honest about what they do – andand the people who lead them. The financial crisis honesty builds trust. So Corporate Purpose is aand banking collapse have transformed the way fundamental part in rebuilding the trust betweenpeople view companies and corporate leadership. corporations and the people that matter to them.And while trust in business is not high, it iseven lower in media, central government and The European Trust & Purpose survey shows thatreligious leaders. rebuilding trust is one of the most fundamental challenges faced by companies operating in Europe.Trust in business varies and depends on a Purpose helps guide companies by acting as thecombination of factors. Overall, Europeans trust standard against which all business decisions arelocal companies the most, national a little less and validated. Companies need to show they are trust-international least of all. Similarly, people trust worthy – not just say it. Companies with a Purposefront-line staff to tell them the truth about a look at the imprint they and their products leave oncorporation, as opposed to its CEO, who is seen as society as a whole, including their employees andmotivated by personal profit and greed. Trust is no customers. Their Purpose is embedded into theirlonger something that companies and their overall corporate strategy, well communicated andcorporate leadership can take for granted – it has understood both internally and externally. Havingto be earned by nurturing a close relationship with a Corporate Purpose and sticking to it, even whenconsumers and other stakeholders and consistently deviating from it would be more convenient orproving a commitment to the values that are financially rewarding in the short-term, builds trustimportant to them. over time and companies who are successful at communicating their Purpose will be the leaders in the challenge of restoring trust.So what can business do to re-build trust with theirstakeholders? The study shows that over two thirdsof people believe that having a strong Corporate Jeremy GalbraithPurpose is important. Almost 80% say they would CEO, Burson-Marsteller Europe,rather pay more for products and services that are Middle-East & Africadelivered and produced responsible and fairly.However, the challenge for companies and thosewho communicate on their behalf, is that a majority
4. 4 Local is best While local businesses are most trusted, overall trust in companies and organisations is very low. CEOs and central government are the least trusted and trust in them has decreased significantly compared to two years ago(chart 1). The decline in trust in corporate CEOs is the most marked in Spain, Portugal and Sweden (chart 2). Least trusting of central government are Portugal, Greece and Spain. Trust in central government is also low in Belgium (at the time the survey was carried out Belgium had been without central government for 11 months). Over 50% of Europeans are more likely to trust companies from Europe. In terms of which foreign countries are most trusted, companies from Australia, Japan and the US are the most trusted, with trust for companies from the BRIC countries being very low very low. 64% of respondents say they don’t trust companies from Russia (charts 3 & 4).
5. 5Chart 1 Provenance is a key factor in trust in business and organisations • While local businesses are most trusted, overall trust in companies and organisations is very low. CEOs and central government are the least trusted 21 1 -9 -11 -12 -28 -32 -33 -33 -36 -48 -51 Local Front National International Nationally- International European European My Foreign- Corporate Central companies line staff companies & organizations owned companies & Parliament Commission local owned CEOs government & businesses businesses companies businesses government companies Compared to two years ago, are you more or less trusting of..? (Showing Among All, Net Trust (Much more + Somewhat more trusting) – (Somewhat less + Much less trusting))Chart 2 Most trusting of companies and organisations per country • Overall, trust is very low across all markets towards industries and companies UK FR IT DE SP SE NO NL CH BE EE DK GR PT Local companies 25 19 -10 38 6 25 26 34 41 17 -16 42 7 -7 and businesses Front line staff -10 -5 -7 17 -1 -32 12 14 17 -11 15 12 3 -43 National companies -35 -24 -16 1 -6 -7 0 -8 23 2 -20 4 -18 -20 and businesses International -14 -10 0 -11 -7 -23 9 -13 -8 -19 -21 3 -53 -3 organizations (e.g. United Nations) Nationally-owned -25 -16 -24 13 3 -22 -18 10 22 12 0 -13 -78 -11 companies International companies -40 -37 -19 -27 -22 -45 -39 -14 -36 -24 1 -25 -17 -5 and businesses European Parliament -51 -27 -16 -40 -23 -44 -51 -34 -30 -26 -12 -41 -29 -13 European Commission -52 -31 -21 -41 -18 -47 -41 -33 -23 -19 -5 -42 -40 6 My local government -43 -23 -44 -14 -46 -41 -18 -12 -15 -39 -38 -11 -65 -9 Foreign-owned -56 -36 -19 -46 -26 -38 -49 -36 -36 -43 -58 -46 -16 -30 companies Corporate CEOs -54 -49 -44 -29 -68 -59 -52 -39 -52 -37 -37 -42 -51 -64 Central government -53 -46 -52 -44 -77 -47 -46 -27 -48 -68 -47 -26 -78 -84 Compared to two years ago, are you more or less trusting of..? (Ranked by Among All, Showing Net Trust (Much more + Somewhat more trusting) – (Somewhat less + Much less trusting))
6. 6 Chart 3 Trust is strongest on the home front • Trust is far stronger for national companies over foreign-owned ones through over a quarter say the origin does not matter I am less likely to trust companies that are from 12 Europe 34 66 59 29 I would be more likely to I would be less I am more likely to The origin of a trust companies that likely to trust trust companies company does not are foreign owned companies that that are from matter to me; I trust are foreign-owned Europe them all equally Which of the following is closer to your opinion? (Showing Among All) Chart 4 Australia, Japan and the US are the most trusted countries • Australian companies rank the highest • Trust for the BRIC countries is very low 56 28 16 55 22 24 48 25 27 21 26 54 18 20 61 14 29 56 14 24 61 12 22 64 Trusted Unsure Not trusted Thinking about foreign-owned companies, how much do you trust companies from each of the following countries? (Showing Among All)
7. The reputation of traditional thought leaders 7has been severely damaged – honesty andgood value are importantMany industry groups are more trusted than tra- The most important characteristics for consumersditional thought leaders. Trust in computer tech- when considering which companies to buy goodsnology, supermarkets, food & beverage and auto- and services from are “honest and trustworthy”motive is higher than in media, central govern- and “products and services are good value”. Fairment, religious leaders and politicians; religious treatment of employees and high quality productsleaders and politicians are even less trusted than and services are also important (charts 5 & 6).the financial services sector. Social Media isslightly less trusted than traditional media.Charts 5&6 Many industry groups are more trusted Honest & Trustworthy and good value are than traditional thought leaders important when purchasing products • Technology, food and beverage and car companies • People tend to focus on the basics of good value are the most trusted, traditional community and honest and trustworthy companies over tra- leaders (NGOs, the media, government, politicians ditional CSR and philanthropy and religious leaders) are least Computer, Harware 12 59 71 Honest 40 & Software & trustworth Online sercices Products & services 39 (Google, MSN,...) 14 55 69 are good value Supermarkets High quality products 28 9 55 64 & services Food 10 52 62 Treats its 28 employees fairly Beverage 7 49 56 High standards in 23 Manufacturers products & services Automotive 7 48 55 Environmentally 19 conscious NGOs 8 49 47 Socially 18 responsible Entertainment Useful products 18 6 38 44 & Television & services Energy 6 35 41 Inexpensive 16 Providers products & services Media 4 34 38 Ethical executive 13 leadership Social Media 7 31 38 Cares about 11 (Facebook, Twitter,...) the community Financial 3 25 28 Strong corporate 10 Services purpose Government 3 21 24 Innovative 9 Religious 4 20 24 Hires & promotes 5 Leaders minorities & women Politicians 2 11 13 Good growth in 5 revenues & profits History of charitable 3 contributions For each of the following, please indicate how Thinking about what is important to you about companies, trustworthy you consider each group or industry to be...? which of the following would you say important when (Showing Very/Somewhat Trustworthy considering which companies to purchase products on a four-point scale for Among All) or services from? (Showing Among All – Respondents allowed to pick up to three)
8. 8 CEO Reputation has taken a severe hit Corporate leadership is under attack as never before. Banking bonuses, the financial crisis and golden parachutes have all undercut trust in CEOs. Overall, CEOS are seen to be motivated by perso- nal profit and are seen as less trustworthy than employees. Three-fifths believe that CEOs are less trustworthy than the average employee and nearly half believe that their motivation is perso- nal profit. Only 3% believe that executives are motivated by a desire to contribute to society through delivering quality products or services. The lack of trust in CEOs also means that consu- mers want to hear about a company’s values from its front-line staff rather than from the board or senior corporate leadership.
9. Trust and Corporate Purpose 9The phrase most closely identified with Corporate The 2010 Purpose Impact Ranking found thatPurpose is “Balancing making money with acting a strong, strategically coherent and wellresponsibly” (chart 7). This fits with the theme of communicated Corporate Purpose is associatedour 2008 survey which concluded that companies with up to 17 % better financial performance andthat deliver on Purpose & Performance* are builds trust with stakeholders. Communicatingviewed as role models and are more trusted. Corporate Purpose more effectively is also a growing trend as companies increasinglyTwo thirds of respondents in the European Trust understand its impact on financial performance& Purpose survey said a strong Corporate Purpose and the importance of their social role. Corporateis important and close to 80% said they would Purpose explains up to 8% of the variation of therather pay more for products and services that financial performance of leading Europeanare delivered and produced responsibly and fairly companies within the same industry.(chart 8) – this does not mean they all would butit is an important indication of consumer intent. Corporate Purpose communication is thereforeWhile consumers believe a company’s highest an increasingly important strategic tool forpriority should be its consumers, the majority feel companies and one that few business managershowever that companies put profits first. Even and corporate communications departmentsmore worrying, many feel that companies have can afford to ignore – especially in these timesbecome more dishonest over time and that most of declining trust.of their communications are lies (chart 9).Companies’ websites are regarded as less trust-worthy than personal contacts, third party watch-dogs, search engines and national TV news.Corporate websites are perceived as dishonestand externally-focused, designed only to sell pro-ducts and services.Chart 7 Corporate Purpose goes hand-in-hand with business performance • While acting responsibly is important, money making is seen as part of the definition Balancing making money with acting responsibly 31 Making money and driving profits 22 A companys guiding principles for making 18 decisions beyond profit making Producing goods and services for their customers 17 The organisations approach to doing business 11 Which of the following do you think most closely defines ‘Corporate Purpose (Showing Among All)* In 2008 Burson-Marsteller conducted a proprietary survey on the theme of Purpose & Performance in cooperation with Penn, Schoen & Berland in11 European countries amongst 200 leading corporate executives and opinion-makers (CEOs, presidents, government officials, financial analysts, academics,NGOs, journalists, and communications heads / managers). The research evidenced that 40 % of a company’s reputation is determined by its Purposeand 60 % by its Performance. Striking a balance between substance and responsibility in a world where corporations are expected to deliver on profitand ethics is imperative. However, there is an in-built tension between the two objectives, and management must find a way to strike the right balance.
10. 10 Chart 8 Responsibility and fairness are important • A strong corporate purpose is important • And consumers say they would rather pay more for products and services that are produced responsibly 32 23 68 77 A companys corporate A company that has a I would rather pay I would rather pay purpose is not important strong corporate purpose more for products less for products to me is important to me and services that are and services and not delivered and produced know about how responsibly and fairly they are delivered and produced Which of the following is closer to your view? (Showing Among All) Chart 9 And companies are seen as dishonest • Many feel that companies have become more dishonest over time and that they cannot be trusted with personal information 39 61 44 56 Generally, corporations Generally, corporations Im generally relaxed Im generally suspicious and their spokespeople are and their spokespeople about the data that about the data that honest, and most are dishonest, and most companies store on me companies store on me communications from communications from and my family, as they and my family, as I think companies are the truth companies are lies typically only use it for it can often be used in marketing and customer a way that infringes on feedback my privacy 72 28 Companies were Companies are more trustworthy more trustworthy when I was a kid today than when I was a kid Which of the following is closer to your view? (Showing Among All)
11. Key steps to agreeing and communicating 11Corporate Purpose 1 2 3 4 5 Agree and communicate Identify internal Develop your Purpose internally – and external Corporate and ensure it is received and Integrate Purpose Communicatestakeholders – these Purpose - what is understood. with the broader Purpose externally will range from our “reason for Remember that corporate strategy to stakeholders –senior management being”? What is the employees are your and link it to all and ensure it isand other employees standard against Ambassadors and key strategic received and to consumers, which our business most trusted initiatives. understood. regulators, media decisions areand other audiences. validated? spokesmen and need to buy into the strategy and message first.
12. Jeremy Galbraith Burson-Marsteller EMEACEO, Burson-Marsteller Europe, 37 Square de MeeûsMiddle-East & Africa B-1000 Brussels+ 32 2 743 66 11 + 32 2 743 66 email@example.com www.burson-marsteller.eu